China's Telecommunications Reform Nears Completion

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Last updated at: (Beijing Time) Friday, May 17, 2002

China's Telecommunications Reform Nears Completion

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The revamped China Telecom and China Netcom make their respective debut in Beijing today under their new names of China Telecom Corporation and China Netcom Communication Group Corporation.

With the founding of the both corporations, the restructuring of China's telecommunication industry is said to be running towards a temporary completion.

According to the state telecom structural reform plan, the former China Telecom was split into southern and northern parts.

The new China Telecom Corporation is still entitled to retain the goodwill and intangible assets of "China Telecom", maintain business in 21 provinces and cities in southern and north-western China and hold 70 percent of the national trunk transmission network assets owned by the former China Telecom.

The 10 northern provincial corporations of the former China Telecom including those in the provinces of Henan, Shandong and Northeastern provinces, together with the former China Netcom, and Jitong Communications Corporation, merged into the new China Netcom Communication Group Corporation, holding 30 percent of the national trunk line transmission network assets.

Reform in line with commitment to WTO

Both new corporations have now become two fixed line telephone network enterprises with equal capacity in China's telecommunication market.

The two companies both have complete domestic long-distance trunk transmission networks and local telephone networks in their own areas and they are also allowed to build and operate local telephone networks into each other's areas.

After the overhaul of China's telecommunication enterprises, the market is now shared by six corporations, namely China Telecom Corporation, China Netcom Communication Group Corporation, China Mobile, China Unicom, China Satcom and China Railcom.

China will gradually open up its telecommunications market to foreign capital in years ahead, fulfilling its promises upon entering the World Trade Organization (WTO), which will undoubtedly bring tough competition to a market currently dominated by Chinese ventures.

In order to increase the strength of domestic firms in future competition, the Chinese government has been reforming its telecommunication industry since November last year.

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